Not everyone pays the same rate for the same life insurance policy. The process by which the insurance company determines who is eligible for a policy, and what they will pay for it is called “underwriting. There are various factors in underwriting an individual life insurance policy. These include, but are not limited to:
Lifestyle, i.e. alcohol, tobacco use, sports and hobbies
If the results of the underwriting evaluation determine that the person is insurable, they will then usually be issued a risk rating. Individuals applying for life insurance who are of the lowest risk are rated as “Preferred”, and receive the lowest rate. How the rating is assigned differs from company to company, and this is why it is recommended that those who fall into the “rated” category, and therefore have to pay higher premiums shop around for the best rates.
Disclaimer - The above description/explanation is intended as a guideline only,and is not to be interpreted as a recommendation to buy or sell any insurance products, or to provide legal or financial advice of any kind. Also, Bergen Insurance. Does not warrant or assume any legal liability or responsibility for the accuracy, completeness, or usefulness of any information, apparatus, product, or process disclosed. No reproduction or republication permitted.